Although most memecoins lack practicality, they demonstrate the innovative potential of the cryptocurrency field through gamified investment processes and Decentralization financing.
Author: Max Parasol
Compiled by Tom, Mars Finance
memecoin is not useless: they bypass securities laws, do not make venture capitalists profit, and are also very interesting.
Meme coins are the essence of cryptocurrency: social trends, satirical humor, and the lure of absurd profits, all wrapped up in a useless token. They’re not for Warren Buffett, but they’re perfect for the masses seeking entertainment, community, and a way out of their mundane lives.
“Memes are leading indicators,” said Danny Yang, founder of OnChainMonkey, referring to the crazy returns compared to other indicators. Memecoins gamify the investment process, attracting investors to follow invisible trends from election results or join the latest coin offerings within ten minutes of the arrest of the UnitedHealthcare CEO shooting suspect. This is very similar to the style of 4Chan."
Building communities, social bonds, and enjoying fun are all part of the appeal of memecoins. “Humans are social creatures, and memes are about finding entertainment in the same thing,” Yang said.
The memecoin itself is not important. It is a social game that requires a large number of players, and the memecoin is judged by how many people may want to participate in this game.
But besides the foolish fun and money-making opportunities, what is the real use case of useless memecoin?
PNUT is suppressed, but as a memecoin it becomes stronger. (Elon Musk, X)
Use Case 1: Circumventing US Securities Laws
First of all, let’s clarify one thing - the uselessness of memecoin itself is a special use case. They bypass the US securities regulations that suppress the ICO frenzy. In addition, memecoins are particularly not covered by the expanded encryption powers proposed by the Australian Securities and Investment Commission. Why is that? Because they do nothing.
“In fact, issuing a memecoin without a use case is safer than issuing a useful token today,” wrote Chris Dixon, managing partner of a16z Crypto.
The US securities law focuses on the Howey Test to determine what constitutes an investment contract. Memecoin only represents a concept and does not promise any return from the efforts of others, and therefore is not subject to this test. This regulatory friendliness has allowed memecoin to spread like wildfire during the Crypto Assets war (2022-2024).
memecoin is the biggest Cryptocurrency narrative of 2024, accounting for 14.3% of CoinGecko’s market share in the second quarter. Now, with Donald Trump becoming the incumbent president, it is expected that the new chairman of the U.S. Securities and Exchange Commission (SEC), Paul Atkins, may allow ‘genuine’ projects to raise funds again through a proposal similar to Hester Peirce’s 2020 ‘safe harbor’. Will they gradually disappear?
Use Case 2: Political Speculation
In a world where people use technology to create social connections to their past experiences, memecoin allows holders to participate in and capture the spirit of the political era. Memecoin has been created to support and oppose candidates in the US presidential election.
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memecoin is for everyone, including Gary Gensler. (X)
Argentina’s liberal president Javier Milei also has a memecoin specifically for his reforms. The social utility of allowing people to express political views in a monetary way can be seen as parallel to the text donation efforts running in major election campaigns.
However, social participation or utility should be better understood as capturing the ‘spirit of the times’. Daniel Drescher, Vice President of Business Development at Sal’Ad Labs, believes that in an interview with ‘Magazine’, Donald Trump’s new friend and future head of the Department of Government Efficiency (DOGE), Elon Musk, is a typical example.
How does Dogecoin become the gold standard in this uncertain Web3 world? They have perhaps the most powerful influencer or key opinion leader in history - the richest and undefeated person in the world, Elon Musk. He is the inspiration for Iron Man. For fans of Ayn Rand, he is the god-like John Galt who created an engine powerful enough to light up the whole world.
Drescher is more inclined to see memecoin as a “brand coin”. Typically, they require a key opinion leader or a celebrity worshiper to promote the coin. Successful memecoins have “fanatical followers who live and die for it. This is what gets them up every morning.”
The analogy of the spirit of the times struck a chord. For example, when then-presidential candidate Joe Biden stumbled on the stairs, Kamala Harris’ memecoin surged, and she was subsequently removed by the Democratic Party as their nominee.
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Popular political memecoin. (CoinMarketCap)
Use Case 3: Charity Trojan Horse
memecoin can be a Trojan horse for more meaningful projects, such as fundraising for charity, launching casinos like Iggy Azalea’s Motherland, or launching exchanges like ShibaSwap.
As written by Vitalik Buterin, the founder of Ethereum - a person known for donating memecoin to charity -:
“Of all the coins I’ve seen, what’s more interesting is that the majority of those token supplies (or some ongoing fee mechanisms) are dedicated to some kind of charity.”
“It feels like there’s an unoccupied opportunity here to try to create something more positive and lasting.”
The memecoin NEIRO of the Neiro Foundation is trying to become the next Dogecoin by combining practicality and speculative growth.
The question is, who is the Trojan horse? Is it for charity or speculative rise?
The memecoin is named Neiro, Neiro is a rescued Shiba Inu adopted by Atsuko Sato, the owner of the original ‘Doge’ Kabosu.
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Doge vs. Neiro. (X)
The Neiro Foundation is a collective effort aimed at providing funding for the rescue and welfare work of Shiba Inu dogs around the world, providing necessary resources and financial support to dog shelters and charitable organizations that improve Shiba Inu’s life. This breed is prone to several common health problems, including hip dysplasia, glaucoma and cataracts, and progressive retinal atrophy.
SlumDOGE Millionaire gained public recognition after converting $180,000 into over 3 million DOGE, which is documented in the documentary ‘This Not Financial Advice’. He is now the spokesperson for the coin and states, ‘Despite the increasing popularity of memecoins, which has attracted a lot of skepticism, many critics overlook the fact that some memecoins have clear and positive missions.’
In addition to viral humor, some memecoins support charitable initiatives and have gained enthusiastic community support. The best memecoins have a strong narrative foundation, resonate with an increasingly socially conscious Web3 user base, and demonstrate the tremendous potential of DeFi to drive philanthropy.
Use Case 4: Funding the Launch of AI Agents
AI agents have great practical potential. Imagine an AI agent that can automatically rebalance your investment portfolio, so that profits are automatically transferred to high-quality coins such as Bitcoin, Ethereum, and SOL, avoiding you holding 90% of memecoins.
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Sometimes, it’s difficult to distinguish between robots and humans. (X)
It seems that one day, AI agents may actually guide autonomous DAOs. But for now, they are highly centralized around the endpoints of memecoin trading bots. Bots like Truth Terminal interact with users on the X platform, creating artificial hype, driving community engagement, and purchasing memecoin.
Take a look at Fartcoin, the AI-inspired memecoin that soared to a market cap of $900 million through the “immutable law of comedy, ‘Hot Air Rises’.” It is quickly catching up with another memecoin GOAT promoted by Truth Terminal.
The entire concept of launching memecoin through autonomous AI agents is a meme in itself, because many ‘AI agents’ are just disguised humans, GOAT is human-made. However, the growing number of real agents highlights its potential.
Calanthia Mei, co-founder of Masa, said, ‘There is a huge difference between intelligent AI agent memecoin and stupid memecoin.’ Mei, a former founding member of PayPal’s venture capital division, talked about the ‘perceptiveness of memecoin’ - she referred to the intersection of AI and memecoin, where AI agents perform tasks such as trading.
“In addition to making money, the side effect of memecoin is to make the technology cool. They shine a spotlight on technologies that only a small percentage of people care about.”
memecoin is helping fund and launch proxies on Virtuals Protocol, AI proxies that can be programmed to interact with tokenomic designs. It also allows for no-code AI proxy building, tokenization, deployment, and more sophisticated designs.
Mei’s company Masa is a ‘Decentralization data mining network’ that provides real-time data to support the use of retrieval-augmented generation (RAG) and context-aware AI agents that rely on pre-planned prompts for ‘emotional intelligence’. These agents can learn new things in real-time and acquire new memories, she told Magazine.
Therefore, in this scenario, these RAG-based AI agents are equipped with dynamic data retrieval, emotional intelligence, and memory capabilities, enabling them to have context awareness and adaptability in real-time.
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Mei believes that AI agents are unstoppable use cases for trading
Mei is sure that the meme will accelerate the experimental connection of AI with encryption. Since the GOAT story came along, she has received “three times as many inquiries in the last few weeks as the previous AI agent development.”
Think about it - creating an intelligent AI agent memecoin that roams on Crypto Twitter, the home of encryption market sentiment. This is almost an unstoppable investment argument.
Use case 5: Launch tokens fairly and avoid retail investors being victimized by venture capitalists
For years, retail encryption investors have been exploited by venture capitalists. These investors entered early, buying a large amount of token supply at prices far below the eventual market price. This resulted in absurdly high valuations after complete dilution, and retail investors missed out when venture capitalists sold off tokens. No wonder users burned by unfair token economics have turned to memecoin, which can—though usually doesn’t—launch fairly.
“Masa’s Mei said, ‘For some projects, memecoin provides much-needed funding for developing their technology, escaping the cold venture capital market and Web3 echo chamber.’”
In Murad Mahmudov’s viral Supercycle speech at Token2049, he believes that fully unlocked memecoin means tokenized memes are actual products. There are no venture capitalists and no lock-up periods. Because it has no revenue, it cannot be priced as an asset, which is instead an advantage.
In the end, memecoin is useful for a new type of financing tool, said Zhen Yu Yong, CEO of Web3Auth, a white-label wallet company that builds wallets for Trust Wallet and many Fortune 500 companies, with 20 million monthly users.
Of course, most memecoins will fail. But now, you can launch a tokenized project without market makers, with the opportunity to succeed, without the interference of venture capitalists and backroom equity transactions.
The lack of venture capitalist support for most memecoins is clearly part of the retail appeal. Those who missed out on Bitcoin, Ethereum, or any other major coins in 2010 can get rich immediately without the risk of venture capitalists messing up the pre-seed round. This is an ideological investment argument - the dream of veterans.
In short, memecoin is like an ICO cartoon version without the preset that someone might try to build and launch a product.
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The most accurate meme in the ICO era. （LinkedIn）
